I presume that the Deputy's reference to flexibility under the Stability and Growth Pact is to the "investment clause", which allows for a temporary deviation from the required structural budgetary adjustment for capital investment, co-funded by the EU, that increases the potential growth of the economy.
Use of the clause is subject to strict criteria, the most important of which relates to the concept of "bad economic times". This is defined as having negative GDP growth or that output is sufficiently below its potential to result in a negative output gap of over 1.5% of GDP. Therefore, Ireland is not eligible as GDP growth was strongly positive in 2015 and is forecast, in Budget 2017, to remain positive over the outlook horizon at 4.2% in 2016, 3.5% in 2017 and 3.4% in 2018. In addition, according to the Commission's Winter 2017 forecasts the output gap is forecast to be positive this year and next.
I want to assure the Deputy that the Government is fully aware of the importance and need for capital investment. In the 2016 Summer Economic Statement, the Government set out plans to invest an additional €5.14 billion over the period to 2021. This increase is reflected in the gross voted capital projections. The outturn for 2016 of €4.24 billion will increase to nearly €7.3 billion per annum by 2021. My colleague, the Minister for Public Expenditure and Reform, is undertaking a capital review this year to ensure that capital spending is fully aligned with national economic and social priorities. This increase in gross voted capital relies to a large extent on the capital smoothing feature used in the expenditure benchmark, a flexibility built into it to, inter alia, encourage increases in capital formation. So the Government is making use of the flexibility in the Pact.
At EU level, Ireland supports the European Commission's €315 billion Investment Plan for Europe, which includes the European Fund for Strategic Investment (EFSI). EFSI commenced operations in July 2015 from which time it has been possible for any project promoter, either public or private, to engage with the European Investment Bank regarding the possibility of receiving loans or guarantees under EFSI for particular projects.
Since inception, Ireland has seen the main potential beneficiaries of EFSI as being in the private sector including entities such as PPP companies. In this regard, I am pleased that the Department of Health's Primary Health Care Centres PPP has successfully drawn down EFSI funds. In addition, the Strategic Banking Corporation of Ireland (SBCI) has successfully engaged with European Financial Instruments such as the COSME and the InnovFin Guarantee Programme, both of which are made available under the EFSI SME Window. These support the financing needs of SMEs and aims to ensure that there is an adequate supply of affordable and appropriate credit to meet their needs.
President Juncker launched a Commission proposal to extend EFSI both in terms of time and financial capacity on 14 September last and Ireland is fully engaged in the discussions towards securing an agreement that will continue to support investment across the EU including in Ireland.
